This study examined individual differences among beginning readers of English as a foreign language (EFL). The study concentrated on the effects of underlying first language (L1) knowledge as well as EFL letter and vocabulary knowledge. Phonological and morphological awareness, spelling, vocabulary knowledge, and word reading in Hebrew L1, in addition to knowledge of EFL letters and EFL vocabulary, were measured. The study also investigated the effect of socioeconomic background (SES) on beginning EFL readers. Participants included 145 fourth graders from three schools representing two socioeconomic backgrounds in the north of Israel. The results indicate that knowledge of English letters played a more prominent role than knowledge of Hebrew L1 components in differentiating between strong and weak EFL readers. The Linguistic Coding Differences Hypothesis was supported by L1 phonological awareness, word reading, and vocabulary knowledge appearing as part of discriminating functions. The presence of English vocabulary knowledge as part of the discriminant functions provides support for English word reading being more than just a decoding task for EFL beginner readers. Socioeconomic status differentiated the groups for EFL word recognition but not for EFL reading comprehension. (Contains 2 tables.)